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US economy can handle high dollar: Federal Reserve's Williams

The high US dollar will be something of a drag on US economic growth this year but the economy is strong enough to handle it, a top central banker said on Tuesday.

PHOTO: BLOOMBERG NEWS

[SYDNEY] The high US dollar will be something of a drag on US economic growth this year but the economy is strong enough to handle it, a top central banker said on Tuesday.

San Francisco Federal Reserve Bank President John Williams said he still expected the US economy to expand by around 2.5 per cent in 2015 even with the dollar high. Mr Williams was addressing an economics conference in Sydney by video link.

He added the rise in the currency was partly due to the easy polices being followed by major central banks in Europe and Japan, which in turn was a positive for global growth and thus the United States.

Mr Williams said he expected the Fed to start raising interest rates sometime this year, in part because the economy was nearing full employment and that would push up inflation over time.